All Forum Posts by: Craig Janet

Your cousin is being kind of a negative Nancy but they are all valid points that many investors overlook. The reality is that the market has drastically changed over the last 3-5 years. Home prices are still high, construction labor and materials, insurance is averaging 20% a year increases, interest rates, etc. 

In my area the rent increases have not come close to covering the increased expenses. Run  the numbers carefully and compare it to a 5% CD and I bet they are not far off.  

Those all sound like minor issues. Remember its the inspector's job to find "something" to report on. Imagine if your inspector said everything was fine and he couldn't find a single thing wrong with the house. You would probably ask for your money back. 

Your parents made $16K on the deal. They will have to pay taxes on that $16K and ONLY that.

You borrowed money on what turned out to be a bad deal. Luckily you got back enough to pay them back plus interest. You need to drop the issue with your parents before you damage that relationship. They are right and you are wrong period.

Depreciation is not some IRS tax give away program. All it does is delay your tax liability. Now you must pay the Tax Man for those five years of basically tax free income.

Scheduling a showing. Dealing with no shows even after confirming 30 minutes before the appointment.

I love when someone ask me if I'm the owner, that already tells me that they have been turned away from large real estate companies and they're looking for a sucker.

If it's a long term tenant and the paint will probably have to be redone anyway. I say go for it. As other's have said it makes the home feel like theirs.

I have so many questions? Did you tour the property at all before buying? You replaced both HVAC systems why? Were they working before? Why new windows? Were they damaged, this could have been noticed with a quick walkthrough.$100K for two HVAC systems, windows and electrical panels is pretty steep and is going to be pretty hard to overcome. 

Everyone is mentioning depreciation like its some sort of IRS give away program. All it does is postpone your tax liability, yes you can 1031 but that's just another delay tactic until death. 

I've been buying properties since 2010 but with current rents and increased insurance, I stopped 2 years ago. It's not worth the hassle and risk to squeeze out another 2-3% over a CD or T Bill.

I don't deny that the insurance companies have had a bad couple of years but What about all the years perhaps decades they were profitable? What happened to all that money? It went to the shareholders and CEOs instead of putting it aside for the bad times. Very shortsighted!

I think the casino analogy is accurate the casino doesn't just cut and run after a high roller goes on a hot streak. They have reserves to weather the ups and downs. I live in Louisiana and we went 15 years without a major storm then we were hit with two and all of sudden the insurance companies are broke and left the taxpayers holding the bag.

I don't understand the purpose of this OP. Was this to brag about the renovation cost? The place looks great but we need more information to know if it was a good investment. What was the condition before, what (if any) rent increases, before and after value, and many more. 35K on a small apartment in most situations is nothing to brag about.

Wow this is a very complicated deal. If you really value your relationship with your brother you may have to tell him you got cold feet and want to sell the property and move on. You might loose a little money but you would have lost more from this one sided deal anyway.